The Fed is close to ending its balance sheet shrinkage program. One of the main factors attributing to this is the Fed’s uncontrollable liabilities such as currencies. The Fed’s currencies and non-bank deposits are growing at a rapid rate and making it hard to contain asset shrinkage. As liabilities grow, it puts pressure on the Fed’s balance sheet because assets and liabilities need to equal out. The CME Group’s Blu Putnam, provides great insight into this situation in the video below.

CME Group